LEADERSHIP IN TIMES OF CHANGE - A study by Staufen AG and the Federal Association of the German Aerospace Industry (BDLI)
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AERO SPACE 2019 LEADERSHIP IN TIMES OF CHANGE A study by Staufen AG and the Federal Association of the German Aerospace Industry (BDLI)
Table of Contents
04 EDITORIAL
1
06 ARTICLES FROM EXPERTS
2 06 Making the Start-Up Culture a Mentality
Marco Wagner, Member of the Management Board,
Airbus Germany and Christoph Heine Partner,
Aerospace & Defense, Staufen AG
09 Digitization Challenge:
Don't Give Stagnation a Chance
Dr. Christian Abegglen, Managing Director
St. Galler Business School
12 ABOUT THE STUDY
3
14 THE RESULTS
4 15 Necessary Change – Many are Lagging Behind
16 Favorable Review, Optimistic Outlook
18 Soft Digitization Factors are Underestimated
19 New Competitors from China
20 Prerequisites and Obstacles for Digital Change
21 Leadership Culture: Between Theory and Practice
24 The Top Problem at the Top
28 Digitization and Leadership
30 CONCLUSION
5
1 Editorial
Despite tough global competition, the German aerospace industry is in a great posi-
tion. Driven by world-wide growth of air transport and in an age, in which aerospace
is becoming increasingly more commercialized, our industry – from the major com-
panies to the SME/SMB have been experiencing above-average growth over the last
few years. In every passenger aircraft delivered today anywhere around the world,
we can find technology “made in Germany.” Our medium-sized suppliers are not only
the “hidden champions” of our industry but are truly also global players, because they
have not only seen success with Airbus but also among OEMs outside of Europe, and
the tendency is growing.
How can aerospace in Germany continue to advance its success story going forward? Among
the current challenges are digitization with its associated disruptive technologies as well as
an export policy, the structure of which requires a set of common rules. It is with great con-
cern that we are observing an increase in unequal global conditions that could lead to mar-
ket forces becoming inadequate in their ability to sustain Germany's innovation and com-
petitive advantage. The overall goal pursued by our civil aviation industry is low-emission
flying: As an industry, we are focusing our efforts on creating a largely emission-free aircraft.
How well is our industry set up in this complex environment? In order to get a response
to this question as well as additional ideas, BDLI teamed up with Staufen AG to conduct a
survey among the top managers of our member companies. Core questions included: How
agile are the companies in the German aviation and aerospace industry? How effective are
their executives and how willing are they to implement change? As a whole, how interested
are organizations in becoming digitized?
I hope you enjoy reading the study!
Volker Thum,
Managing Director,
Federal Association of the German
Aerospace Industry
(BDLI)
4 STUDY: AEROSPACE 2019 EDITORIAL
The economic environment of the aerospace industry is much more dynamic to-
day than it was just a few years ago – even this industry is greatly affected by the
fast acceleration of technological developments. Companies in the aerospace
industry should see this as an opportunity.
Disruptive innovation is playing an increasingly important role, and not just for the evolution-
ary enhancement of existing products and services. This kind of innovation is typically assigned
to young companies and start-ups. Yet, even established companies can become disruptors.
However, to do so, they must actively advance digital transformation and consistently align
their value creation. It is not enough to simply concentrate on technologies. Digitization also
means a change in how work is performed and in the corporate culture.
Agility and “lean” are important topics. So many companies are now using agile methods,
yet its implementation oftentimes can be characterized as experimental in nature. This is
due to the fact that agility does not correspond well with a method that has been in practice
for decades, in which each step in a workflow must be documented and receive multiple
approvals from management.
In response to the challenges by disruptors, companies should look into a new solutions.
And this is already happening. Some airlines and transport companies are showing us how
it’s done. They are developing new applications and business models that are already being
tested in practice. Our intention with this study is to offer an orientation tool in times of
change for your company and the companies in the industry.
Wilhelm Goschy,
Member of the Board of Directors,
Staufen AG
STUDY: AEROSPACE 2019 EDITORIAL 5
2 Articles by Experts
MAKING
THE START-UP
CULTURE A
MENTALITY
Airbus Labor Director, Marco Wagner, (Member of executive management of
Airbus in Germany) and Staufen Partner Christoph Heine (Branch Manager
Aerospace & Defense) explain in an interview the approaches that are already
available today in the German aerospace industry for a modern leadership
culture and where potential has yet to be seized.
6 STUDY: AEROSPACE 2019 ARTICLES BY EXPERTS
Mr. Wagner, there is hardly any term that is so omnipresent Can management learn the necessary amount of open-mind-
these days than “agility.” How well do the aerospace indus- edness to practice new leadership methods? Or is this a
try, which traditionally long-cyclical in nature, and agility quality that one has to be born with?
get along? Are Airbus and agility even a good fit?
Heine: Of course, a certain innate curiosity for new things is a
Wagner: Innovation cycles are becoming shorter and short- prerequisite. However, what is ultimately the deciding factor is
er, even in the aviation industry. This kind of acceleration also that companies provide enough space for this kind of curiosity
brings changes to our research activities. For example, in many in the day-to-day. This is easily said but not always that easy
areas we are specifically working with start-ups in order to be in practice. Often we need to balance resources and overcome
able to learn from their maneuverability. actual and perceived obstacles. Coaching can be a helpful in-
strument for this.
What exactly does this kind of collaboration with start-ups Wagner: Allow me to briefly clarify how something like this is
look like? practiced at Airbus. For example, we have teams headed by
a manager, but who only steps in if the work method that the
Wagner: We give these typically young entrepreneurs an op- team developed on its own clearly puts the results at risk. Other
portunity to test their concepts in the aviation industry. While teams have alternating bosses – one project is supervised by
doing so, in some cases we provide them with the financial sup- colleague A, another project by colleague B.
port they need. The goal is always a win-win situation. Not only
do we want to see the specific results of the tests, but it is also How are these kinds of freedoms and flexible structures
important that we carry over the mentality of a start-up culture compatible with the time and delivery pressures that many
into the thought processes of a “giant” such as Airbus. projects are subject to?
Mr. Heine, are these kinds of collaboration something for Wagner: Here as well, leadership skills are a necessity. Even
medium-sized aerospace suppliers to consider as well? in high-pressure situations, leaders must take a step back and
scrutinize the current approach instead of forging ahead with
Heine: The necessary structures for this are definitely available a blunt ax unchecked. This ability to pause and review reveals
to do so. Start-ups are able to solve partial tasks for Airbus just a lot about the manager’s experience. And managers can only
as well as they can for suppliers, and often they are much quick- gather experiences and transfer them into the teams if the com-
er and much more focused in the process than the company it- pany consciously allows them to do so.
self. However, this only works if executives identify the relevant
tasks and delegate them consistently to start-ups. Fitting in this How do you motivate your executives to actually use this
vein is one of the core findings of the study presented here (see freedom?
p. 28), which is that the key to agility, new work and co. is clearly
in executive management. Wagner: One thing that I do is to hold a large event with up to
400 executives once a year. Here, successful examples are pre-
sented on a large stage by managers from this circle on how
leadership and collaboration are already being innovatively re-
thought.
STUDY: AEROSPACE 2019 ARTICLES BY EXPERTS 7
2
Heine: Of course, what is important here is cultivating an error economically successful companies, in which the middle manage-
mindset that does not stigmatize negative experiences, but in- ment spends 50 to 70 percent of their working hours communi-
stead understands them as a part of a learning company. cating.
Wagner: Exactly right, because looking back, every experienced Wagner: We have also done away with annual performance re-
executive learned much more from their failures over the course views. We prefer to speak in "people time." Every department
of their carrier than from their successes. And only if an executive works out for itself the best cycles during which meetings should
is able to openly discuss mistakes with the team and has the cour- be held.
age to work together to find a solution, can trust be developed.
Don’t employees have to be trained differently for this kind
Do these approaches also work in a timed production? of leadership and communication?
Wagner: Yes. Because, of course, even if in such a scenario we Wagner: Absolutely! What is important here is that both sides
cannot spontaneously turn everything around, there are also drive change. For example, instructors should no longer be feed-
problems that can only be solved within the team and with a suffi- ing trainees what they need to learn, but instead be their learn-
cient amount of time. Just for the sake of clarifying: This new work ing companions. At our site in Hamburg, aircraft mechanics are
environment – no matter whether it is in research or in produc- being trained based on a new teaching approach. They develop
tion – does not mean that everyone can do whatever they want. solutions for our internal customers in our plants, which require
them to acquire specific skills and the learning companions con-
What are the three core skills that an “ideal Airbus manager” vey what these skills are. Our newest group of trainees have com-
must have in the new working world? pleted their first year and we have received extremely positive
feedback. As a result, our foremen in the workshops are thrilled
Wagner: First off, our managers need to be excellent commu- that the trainees now no longer have to ask so many questions
nicators so that priorities and goals are clear and unambiguous and are taking more responsibility and are more focused on the
across all hierarchical levels. In addition, they must also have the customers in their work, while generally participating much more.
capability to (self) reflect – especially, as already mentioned, in Heine: Examples of this kind especially, in my opinion, show that
tense operational phases. in order to improve the leadership culture, company-wide ini-
And thirdly, an executive must be able to inspire and convey a tiatives can make a lot of sense in the aerospace industry. Small
sense of purpose. So, they must be able to breakdown targets in to medium-sized businesses especially seem to have difficulties
such a way that every employee can recognize his or her contribu- structuring a cooperative training program that fits their ideas
tion in achieving the objective. and their needs. However, this would be an opportunity to bring
Heine: I can only underline this profile, because the freedoms as- SMEs to an entirely new level.
sociated with the term agility require not less, but instead more Wagner: Even if in case of doubt we compete with these other
communication. And we are not referring to the infamous annual companies for the same employees, we at Airbus are very open
performance review in which employees are given feedback that to such initiatives. Especially since we can most likely learn much
has “accrued” over the last twelve months. We are talking about more from these “small” companies, who are often world leaders
weekly or even daily feedback meetings. I know some extremely in their fields, than the other way around .
8 STUDY: AEROSPACE 2019 ARTICLES BY EXPERTS
DIGITIZATION
CHALLENGE:
DON'T GIVE STAGNATION
A CHANCE
Digital transformation should by no means be considered a sure-fire success.
Even German flagship industries and technology integrators, such as the auto-
motive industry, the electrical industry, the aviation and aerospace industry,
but also the mechanical engineering industry have yet to show any substan-
tial benefits from the new opportunities. Although the tremendous need for
action has been recognized, and initial success can be celebrated, by and large,
however, measurable productivity gains and really successful digital business
models are the exception. As the study “Aerospace 2019 – Leadership in Times
of Change” has confirmed, management teams and top management often
find it difficult to develop their own company in a targeted manner into the
future in an increasingly networked and digitized world.
Dr. Christian Abegglen,
Managing Director
Founding Director and President
of the Administrative Board of
St. Galler Business School
STUDY: AEROSPACE 2019 ARTICLES BY EXPERTS 9
2
Consequently, there are very few systematic digitization mea- So, for those who respond too slowly or not specifically to the
sures, piecework remains fragmented, or the organization be- changes taking place may quickly loose their competitive advan-
gins to stagnate. The aerospace industry in particular, with its tage.
already highly complex products and processes, is currently
facing a radical change. With regards to products, innovation There are no patented remedies to deal with the current wave
and life cycles are increasingly under pressure, while require- of digitization, nor are there any instructions on correct lead-
ments relating to safety and reliability are also becoming more ership in times of disruptive upheavals. However the holistic
stringent. An intelligent networking of products combined with and dynamic St. Gallen approach, for example, which has been
sophisticated algorithms for data analysis, however, also offer available for a while now, offers a suitable reference architec-
new opportunities to significantly increase the use efficiency. In ture and an adequate framework for thinking to combat stagna-
the area of operations, widely distributed IT systems must be tion. It has demonstrated its strength as a reliable compass for
harmonized and renewed in day-to-day operations in order to successful navigation, especially in times of change and great
provide reliable and up-to-date data at any time and any place. complexity.
It is imperative and urgent that leadership and management The current challenges as well as the current findings of the
be urged, encouraged and, if necessary, given the skills to face joint study between Staufen and BDLI now finally place the
the current challenge and to structure their companies based long-known principle of self-organization into the focus of the
on sustainable business models. These business models may discussion, this time under the term "new leadership." In order
require radical reconfiguration in order to allow companies to to quickly adapt to new technologies and needs, they generally
move forward into a successful future. This is essential because aim towards independent change processes. Foreign control,
the opportunities offered by increasing digitization and net- rigid hierarchies, “Command & Control” from top to bottom,
working can put success factors of past business models and rigid measuring madness, etc. must be replaced with process-
their controlling leadership philosophies rapidly to the test and es that rely on self-control and and self-structuring. Knowledge
devalue them. transfer, cross-functional and cross-hierarchical collaboration,
flat hierarchies, error culture, networks, monitoring and coach-
ing are all keywords associated with this.
10 STUDY: AEROSPACE 2019 ARTICLES BY EXPERTSOn the other hand, within this leadership mentality, there are In fact, is it primarily about iteratively developing common val-
proven mindsets, methods and tools based on the St. Galler ues and overall objectives using feedback loops, which are then
approach, which, thanks to their process, iterative and feed- embodied and maintained by upper management, irrespective
back-oriented concept, ensure commitment, implementation of any difficulties. This way, the intention of leadership, and thus
and continuous adaptation. The goal is to systematically teach the willingness to take responsibility, is visible and tangible. This
and train leadership to take on this mentality. This requires that in turn creates confidence among the staff, to themselves also
leadership is continuously developed and filled systematical- take on responsibility and structuring, thus enabling work in
ly. Simply setting up a suitable operation room that is staffed virtual agile teams, open feedback and the means to proper-
depending on the actual “threat assessment”, where key lead- ly deal with mistakes and errors. This form of de-hierarchized,
ership groups and teams can continuously work on corporate network-oriented work, yet still guided by jointly created values
development in terms of integrated management, has proven and ideals for the future, is capable of convincing other staff
to be an effective instrument in practice. members as well as customers and network partners. In other
words, delegation principles while at the same time a leadership
There are also instruments to systematically indicate a com- standard by creating meaning. The most significant factors have
pany's current life cycle phase and what challenges are asso- always been, are and will remain, among other things: courage,
ciated with that particular phase (“reinvent or optimize?"). The will, attitude, passion, appreciation, decisiveness, and asser-
St. Galler Stagnation Barometer, for example, is just one of the tiveness.
tools available that can be applied to determine to what extent
and in what form there is resistance within the organization to Emphasize the need for integrated leadership principles, make
consistently acting against stagnation. It shows what specifically use of the many suitable thought instruments and methods
needs to be done to successfully clear up blockages. Practical that can be systematically tested and applied by companies and
experience with the instrument has shown how a common tan- their staff. They help to adequately face what is undoubtedly
gible understanding of the future and goals can be achieved, an enormously complex new concept – both progressively and
how commitment can generated and how such visions can sub- observantly at the same time.
sequently be broken down into specific strategies and activities,
which are then consistently communicated.
Author:
Dr. Christian Abegglen is the Managing Director, Founding
Director and President of the Board of Directors of St. Galler
Business School, which is one of the largest and most renowned
suppliers of open management seminars for upper-level
management in the German-speaking area. He, together with
Prof. Knut Bleicher, is also a joint founder of the St. Galler
Association for Integrated Management.
STUDY: AEROSPACE 2019 ARTICLES BY EXPERTS 113 About
the Study
For the study "Aerospace 2019 – Leader-
ship in times of change," the consulting
company Staufen together with the Federal
Association of the German Aerospace
Industry (BDLI) surveyed a total of
72 executives from the aerospace industry
in Germany in early 2019.
Every second respondent in the study
comes from top management, meaning
an owner, director or executive manager.
12 STUDY: AEROSPACE 2019 ABOUT THE STUDYIN BETWEEN
UPTURN AND UPHEAVAL
For many years, the aerospace industry has been very successful, Depending on how you count, here in Germany there are around
achieving maximum sales figures and attracting the best employ- 300 to 500 companies that belong to the industry, of which around
ees. Is it any wonder, then, that the number of global airline pas- 250 are members of the Federal Association of the German Aero-
sengers has more than doubled over the past 15 years? The current space Industry (BDLI). The entire sector directly employs 111,500
political environment pertaining to security, which could not be any employees. The industry is an important player in the digitization
more complex and multi-faceted, has been emphasizing the rele- of the manufacturing industry. For example, engine manufactur-
vance of the aerospace industry for national sovereignty again and ers are pioneers in the use of 3D metal printing or in the field of
again. Moreover, space travel, especially business closer to Earth, KI-based, predictive maintenance. Automated production meth-
has developed to a veritable growth market. There are to date, for ods based on the concept of Industry 4.0 as well have been real-
example, thousands of satellites in service orbiting the Earth. ized by manufacturers and are in initial stages among manage-
Nonetheless, the industry’s success is no coincidence, but instead ment within the global supply chains.
has been hard-won from the high-wage country Germany in a dif-
ficult global competitive market. Currently, young entrepreneurs INITIAL DIGITAL BUSINESS MODELS
from start-up-like companies are the driving force behind innova- The industry is also adapting new digital business models. For ex-
tions in the industry, after new company formations were difficult ample, Airbus has heavily invested in its platform Skywise. It is in-
for a long time due to the high investment costs and the techno- tended to be a reference platform, which will be used by all major
logical entry barriers. At the same time, though, the race for so- players in the aviation industry, allowing them to improve their
called air-taxis has begun; however, it is still unclear when they will operational performance and operating results. In the future, the
actually be operated on a commercial scale. The industry is looking Group plans to not only develop and product aircraft, but also
forward to an exciting and at the same time challenging future. integrate, among other things, predictive maintenance. Lufthansa
Technik with its Aviation Data Hub platform is also investing in
ECONOMIC SUCCESS data as a business concept.
All in all, the industry is showing continued success and will con- However, individual pioneers concentrating on the use of digital
tinue to grow in the coming years. In 2019, worldwide sales from technologies and business models does not mean that the indus-
airline passengers will exceed the $600 billion mark for the first try is actively undergoing change on a broad front. Many compa-
time ever. In comparison: In 2004, the mark was at $294 billion, so nies simply have not yet created the proper conditions; what is
less than half! Most recently, the world's 12 largest aircraft manu- still lacking is a leadership culture and work organization that is
facturers and engine builders earned more than $366 billion com- future-proof, which can be seen in the joint study by Staufen AG
bined, including military technology. and BDLI. At the beginning of the year, a total of 72 executives
This number conceals the approximately 1,800 civilian aircraft in the aerospace industry in Germany – about half of which wer-
delivered, of which every sixth was assembled in Hamburg, eowners, directors and executive managers – provided detailed
from where they were shipped to customers all over the world. statements on the adaptability of their companies.
The industry is very strong in Germany: Hamburg is one of the Germany is a leading space-faring nation and has competencies
three largest locations worldwide for aircraft development and from the launcher sector to applications such as earth observa-
aircraft construction. In every global aircraft delivered we find tion, satellite communication and navigation to astronautical
cutting-edge technology “made in Germany" – the success of the space travel and space exploration, wich was developed in close
supplier industry, the “hidden champions" of the industry, whose co-operation between institutions such as DLR and ESA with the
roots can be traced to almost everywhere in Germany. Net in- industry. Adequate budgeting of the national program and ESA
come figures for all industries combined has been consistently contribution, which keeps pace with international ambitions, also
at EUR 40 billion for the past two years. This number marks an continues to be essential.
all-time record in sales.
STUDY: AEROSPACE 2019 ABOUT THE STUDY 134 The
Results
Although just a few of the top performers
of the aerospace industry are driving digi-
tal change, there is still overall a great need
for action – many companies are lagging
behind. In the study, only six percent of the
surveyed companies self-critically attest to
belonging to the top performers.
14 STUDY: AEROSPACE 2019 THE RESULTSNECESSARY CHANGE –
MANY ARE LAGGING BEHIND
Almost two thirds categorize themselves somewhere in the mid-
dle, while 26 percent define themselves as stragglers. All in all, a
rather moderate self-assessment. The industry seems to be hav-
ing a hard time especially in the area of business models.
A more detailed view into the self-assessment of companies’ abil-
ity to change shows that German companies are technological-
ly very strong. In contrast, for example, US competitors are far
more productive in developing new business models. Offers that
consistently are conceived by customers are immensely promis-
ing. One example: Airlines offer their passengers seamless travel.
Passengers at home and abroad can switch between bus, train,
taxi and airline, without having to wait on the platform or in a ter-
minal – an instrument that customers can integrate with several
additional services long before embarking on the trip. New and
lucrative business models are also available to manufacturers
and suppliers, the majority of whom, though, have yet to tackle.
Just how versatile are aerospace companies with respect to their
basic technologies, system technologies and business models?
Belong to the Are a fair Range in Lagging Do not
top performers average the lower mid-field behind know
Basic technologies 17% 45% 20% 15% 3%
System technologies 20% 36% 33% 6% 5%
1%
Business models 18% 44% 32% 5%
0% 20% 40% 60% 80% 100%
STUDY: AEROSPACE 2019 THE RESULTS 15FAVORABLE REVIEW,
OPTIMISTIC OUTLOOK
Nonetheless, a certain amount of change seems to have taken
place, because a review of the past few years is positive. For ex-
ample, three fourths of companies assess developments within
their own organization as favorable over the past three years.
With respect to customer processes, as much as 70 percent note
a positive trend. The assessment for the near future is similarly
favorable: Almost 90 percent of the companies are approaching
the next three years with optimism.
To what extent has your company
undergone change over the last three years?
Very favorably Favorably Not at all Unfavorably Very unfavorably
Within your own 15% 69% 13% 3%
organization
Customer processes 10% 60% 24% 6%
0 20% 40% 60% 80% 100%
16 STUDY: AEROSPACE 2019 THE RESULTSIn total, what kind of change are you expecting
in your company over the next three years?
6%
Very favorable change
5%
Favorable change 21%
No change
Unfavorable change
Very unfavorable change
68%
The overall optimistic outlook shows that the businesses are hard- With the increasing demands of modern societies and the com-
ly affected by airline bankruptcies and the discontinuation of the mercialization of space, there is great potential in this area. Com-
A380 production line. Here, multiple parallel developments are munication via satellites, Earth observation, security management
intertwined: On the one hand, many airlines are planning regular and careful use of resources are only some of the core topics.
and foreseeable replacement and expansion investments. On the
other hand, aircraft undergo frequent maintenance, during which Placing emphasis on the successful European aerospace industry
numerous components or entire modules must be replaced. In shows the importance of space infrastructure for our society and
both cases, for suppliers this means an appealing market, which economic development. It is important to stress from an indus-
is consistently boosted by the boom in air travel. try perspective that commercialization of space does not mean
In the military aviation industry there are several promising de- that national space travel will be replaced, but will instead com-
velopment projects; however, the situation continues to be tense. plement such developments. Commercial space travel solutions
One of the reasons for this is the changing global security envi- can usefully complement government needs and be the driver
ronment, which could not be more complex and multi-faceted. for economic development, but cannot assume any safety-rel-
In addition to the European MALE RPAS and TLVS programs, the evant or scientific tasks. State and commercial space travel are
joint development and procurement of the Future Combat Air therefore on an equal footing and, in view of the increased com-
System (FCAS) as a European Community project are essential, petition and the special significance of the dimension of space,
which will contribute long-term to maintaining and expanding should be further developed in close relations between govern-
technological expertise for future technologies in Germany. ment programs and scientific and commercial investments. For
Space travel will overcome the challenges in a continuously this space travel, for example, still needs sovereign support, in
changing market over the next few years, but it will still have to particular in areas such as infrastructure (launchers) and technol-
develop solutions for the increasing socio-political challenges ogy funding in order to be able to compete in the global market.
within the traditionally institutional market. These include topics Investment-friendly framework conditions must be established
such as broadband from space as well as security-related Earth for this, while simultaneously setting up an ambitious state space
observations, plus how to deal with cybersecurity and increased travel strategy.
networking.
STUDY: AEROSPACE 2019 THE RESULTS 17SOFT DIGITIZATION FACTORS
ARE UNDERESTIMATED
Numerous changes are being planned both in the aviation indus-
try as well as in the economy overall. The various trends relating
to digital change also have impact here: Networking within the
company, changes in relationships to customers and suppliers,
new business models, adjustments in the management structure
and new work models.
Although companies generally do recognize the importance of
digitization (86%), even less than two thirds expect major changes
in business models, leadership structures and work organization.
This reveals the huge gap between the hard and soft factors of
digitization.
How strong will the changes be with regards to …
Responses from participants who indicated in a preliminary survey that they expect changes
(favorable/unfavorable) for their company
Very favorable Strong Rather weak Very weak
...digitization and
networking within the
43% 43% 14% 0%
company?
... customer and
19% 57% 22% 2%
supplier relationships?
...the business model? 14% 45% 38% 3%
3%
... organization /
57% 38% 2%
management?
...the work environ-
ment (qualifications,
4% 55% 41% 0%
location time, compen-
sation)?
0% 20% 40% 60% 80% 100%
18 STUDY: AEROSPACE 2019 THE RESULTSNEW COMPETITORS FROM CHINA
More and more competitors are entering the stage. For example, the Chinese COMAC (Com-
mercial Aircraft Corporation of China) recently presented the C919, the first medium-range air-
craft ever that was fully developed in China. Initially, the engines will be purchased, but they
too will soon be replaced by products developed domestically. Also for other modules such as
chassis and air-conditioning systems, the manufacturer is still procuring European products.
The project is of great importance to the Chinese government. It intends to offset major invest-
ments by means of purchase obligations in state-owned airlines. Primarily, the C919 is geared
towards the Chinese domestic market, which will have a demand for around 6,000 aircraft by
2035. As of 2021, it will be put into service for the first Chinese customers. By mid-2018 there
were already more than 800 commitments and pre-orders – a respectable achievement. Russia
and India also continue to strive for "their” share of the world market. In brief: European man-
ufacturers are now facing competition that must be taken seriously, particularly because it is
being funded by the state.
Developments such as these make urgent change a necessity. Increased efficiency is certainly
one good solution; resounding competitive advantages can especially be achieved with dis-
ruptive business models. However, to achieve this, additional change is required within the
companies themselves. They must adapt their leadership structure and their work organization
to the requirements of the future.
STUDY: AEROSPACE 2019 THE RESULTS 19PREREQUISITES AND OBSTACLES
FOR DIGITAL CHANGE
According to the surveyed companies, open-minded leadership
and staff are the key to success for implementing changes (see
also guest article by Dr. Christian Abegglen on page 9.) Conse-
quently, 93 percent demand executive managers to be role mod-
els of change, while 73 percent demand that employees contrib-
ute to this path to change. Interestingly enough, structures and
processes as well as financial resources for research and devel-
opment are considered less important. Executives themselves
feel a duty to drive change – presumably also, because they sim-
ply cannot find qualified specialists in the market, who they could
support in making the changes.
What do companies need in order to
be able to handle change well?
Executives are open
93%
to change – they are role models
Employees are open
73%
to change and support it
Exchange with customers, suppliers and scien-
64%
tists about the latest trends and innovations
Next-generation staff, further education
51%
and expertise transfer
Sufficient staffing and time
49%
resources
Structures and processes
36%
are clearly defined
Sufficient financial resources for
34%
research and development
20 STUDY: AEROSPACE 2019 THE RESULTSLEADERSHIP CULTURE:
BETWEEN THEORY AND PRACTICE
The theory does not hold up in the day-to-day, because when
taking a look at their own leadership structure, only around ev-
ery second company confirmed that executives were sufficient-
ly open to change. Even the assessment of companies’ own em-
ployees is only marginally better. The greatest obstacle in the
are of digital change is, however, that 71 percent of the compa-
nies do not have sufficient staffing and time resources.
In your company, for which of the following topics do you see
potential for improvement?
Sufficient staffing and time
71%
resources
Executives are open
51%
to change – they are role models
Next-generation staff, further education
47%
and expertise transfer
Employees are open to change and
46%
support it
Exchange with customers, suppliers and scien-
42%
tists about the latest trends and innovations
Structures and processes
29%
are clearly defined
Sufficient financial resources for
19%
research and development
STUDY: AEROSPACE 2019 THE RESULTS 21One well-known obstacle on the pathe to a digital economy is
the traditional management structure based on the “Command
& Control” principle. The managers surveyed also recognized
this problem; two thirds (67%) find the associated rigid hierarchi-
cal structures to be a major obstacle. Yet, only less than a third
(30%) recognize this problem in their own company. Overall,
the very consistent distribution of responses (multiple answers
were possible) shows that on average, every company has three
“construction sites” and thus is struggling on several fronts at the
same time.
In general, what are the greatest obstacles for a
company’s adaptability?
Lack of resources due to
74%
high capacity utilization
Executives act according to the
67%
"Command & Control” principle
Measures remain stuck
62%
at middle management level
Staff fears
62%
changes
Lack of
50%
next-generation talent
Lack of qualifications among
48%
managers and employees
Political and/or labor-law related
36%
barriers
22 STUDY: AEROSPACE 2019 THE RESULTSWhich of the following obstacles is your company
struggling with?
Lack of resources due to
70%
high capacity utilization
Staff fears
42%
changes
Lack of
42%
next-generation talent
Measures remain stuck
35%
at middle management level
Lack of qualifications among
33%
managers and employees
Political and/or labor-law related
33%
barriers
Executives act according to the
30%
"Command & Control” principle
STUDY: AEROSPACE 2019 THE RESULTS 23THE TOP PROBLEM AT THE TOP
Almost every manager surveyed (98%) is aware that managers
have to act differently during digital change. The need to be
more of a mentor than a traditional boss. However, implemen-
tation is only being intensely addressed by every second com-
pany (33%) or even very intensely (17%). Consequence: Only in
around every third company (35%) are modern managers the
rule.
How often can “mentor executives” be found in your company?
2%
8%
2%
Very often
Often
Rarely 55% 33%
Very rarely
Never
24 STUDY: AEROSPACE 2019 THE RESULTSA very important indicator for a modern management is how For example, transferring analysis into long-term learning pro-
mistakes are dealt with. Even if traditionally fault management cesses seems to be difficult, and in addition, only one third
is strongly underlined in the aviation and aerospace Industry avoids assigning blame to an individual when dealing with mis-
due to the high level of safety awareness, 50% of surveyed com- takes. As watertight as the implementation of safety require-
panies still certify that their error culture could be expanded. ments within the companies may be, where error culture is con-
cerned, there is obviously still some catching up to do, which, by
the way, also applies to the use of additional modern manage-
ment tools.
How are mistakes dealt with in your company?
50%
62%
44%
31%
In our company, criticism Improving In our company, clear and Mistakes are
and feedback are error culture is an binding processes are in never blamed
also asked for from the important part of place for failure/error on an individual
bottom to the top our leadership analysis, so that we can
development sustainably learn from them
STUDY: AEROSPACE 2019 THE RESULTS 25How is good leadership encouraged within your company?
Which tools are already in place?
Already successfully implemented In progress Planned Non-existent
Program for systematic
44% 28% 16% 12%
leadership development
Forward-thinking succession
30% 37% 24% 9%
planning for senior executives
Manager coaching
39% 25% 17% 19%
or supervision
eLearning (in some cases
32% 25% 10% 33%
with success monitoring)
Use of
37% 14% 7% 42%
Shop Floor Management
0% 20% 40% 60% 80% 100%
Almost every third company uses special measures such as
Shop Floor Management, coaching or eLearning for the fur-
ther development of management. Overall, almost half have a
program for systematic leadership development in place and
another fourth is currently establishing one. Almost just as im-
portant is forward-thinking business succession planning for
executives.
26 STUDY: AEROSPACE 2019 THE RESULTSMost companies are self-critical when it comes to leadership
and see a need for action. What is noticeable, for example, is
that feedback discussions are viewed as an unpopular ritu-
al and not seen as an active communication culture (58%). In
addition, the leadership culture suffers in a large number of
companies subject to traditional structures. Far too often tar-
get agreements and compensation are only based only on tra-
ditional KPIs, knowledge transfer within the departments and
between hierarchical levels hardly ever occurs and moreover,
may executives resist introducing new forms of corporate man-
agement. The level in the company that likely has the most to
lose as a result of flat hierarchies and improved communica-
tion: middle management.
Which topics in the area of leadership is there still room for
improvement in your company?
Feedback discussions are often a dictated ritual
58%
instead of an active communication culture
Target agreements and compensation
40%
systems are mainly based on “hard" KPIs
Knowledge transfer
36%
hardly ever occurs
Many executives resist new management
33%
forms and methods
Lack of diversity on management level
22%
(gender, nationality, training, etc.)
Younger generations (Y and Z) and current
20%
executives do not converge
Management positions are mostly filled
18%
internally, while shunning “fresh ideas”
STUDY: AEROSPACE 2019 THE RESULTS 27DIGITIZATION AND LEADERSHIP
The digital transformation is in full swing; the economy and
society are changing immensely. Although examples are well
known, here is just a brief highlight: In the past, a concept like
home office was entirely unknown, because even in office jobs,
employees had to use all work resources at the employer’s lo-
cation. Today however, thanks to fast networks and ultra-light
notebooks, tablets or smartphones, mobile working is techni-
cally no longer an issue. But, has the leadership culture kept
pace with these developments?
The digital transformation of the economy and society
is in full swing. What impact does digitization have
on the topic of leadership?
Applies Likely applies Less likely to apply Does not apply
Digitization will automatically change the
41% 45% 12% 2%
leadership culture
A conscious change in the management
culture is an indispensable prerequisite for
36% 50% 11% 3%
the successful digital transformation of a
company.
Executives without proven digital exper-
tise will no longer stand a chance in just a
20% 53% 16% 11%
few short years
In less than five years, the majority of 2%
purely operational decisions will no longer
be made by executives, but instead by 19% 43% 36%
intelligent machines / robots
0% 20% 40% 60% 80% 100%
28 STUDY: AEROSPACE 2019 THE RESULTSCompanies are also calling for these kinds of development, be- This form of automatism is also seen in the companies, almost
cause, for example, more and more employees are requesting 90 percent approve. Similarly high level of approval is found
a home office rule. The leadership culture must also change with the idea that a conscious change in the leadership culture
as a result. In addition, the responsibility of employees and is an important prerequisite for digital change.
their expectations for being able to work independently is also
increasing.
How do your executives feel about the topic of
digitization?
51% 49% 26% 21% 16% 2%
We have We consciously rely The consistent We no longer hire We offer Our
already firmly on a mix of expansion any special executives
anchored the topic executives with of digital executives training help out
of digitization in a lot of digital expertise is an without on the topic of young tech
our leadership expertise integral part of the digital “leadership and companies
organization and executives target agreements expertise digitization”
(for example, that have other with our
with a Chief strengths executives
Digital Officer)
Here, there is also a gap between how the situation is assessed Obviously, many companies in the aviation industry are at-
and the reality in their own company. For example, when filling tempting to tackle digitalization by applying a savings plan.
new positions in upper management, only just about 80 percent Accordingly, only every second company (51%) has completely
of companies seek to specifically find executives with digital anchored the topic in their leadership organization. In addition,
expertise. In addition, there is little incentive for executives to in many cases, there will most likely be one Chief Digital Officer
acquire digital knowledge, because only a quarter (26%) of the (CDO), who alone is responsible for digitization. This role is dou-
company provides for this in target agreements for managers ble-edged: It anchors digitization in the C-level and ensures only
and only just about one sixth (16%) of the companies organizes a minimum of "digital leadershp”. However, it can also be used
special leadership and digitization training for the various hier- as a fig leaf, merely representing simulated change.
archical levels.
STUDY: AEROSPACE 2019 THE RESULTS 295 Conclusion 30 STUDY: AEROSPACE 2019 CONCLUSION
TRADITIONAL LEADERSHIP CULTURE
WITH WEAK DIGITAL LEADERSHIP
The aerospace industry in Germany is a very important
economic factor with impressive results. It has enabled
Germany to participate in the world’s continuing boom
in the field of aviation. German components and systems
can be found in many aircraft, even in such manufactured
in China. Yet, as in other industries, this strong position
comes with a risk: Companies tend to rest on their laurels.
The joint study between Staufen and BDLI clearly shows that In spite of the good prospects and their optimism, companies
several challenges lurk behind holding the top position as a should sieze the opportunity that digital change brings now
technology company. The leadership culture would not be able and shape their leadership culture on the basis of digitization.
to keep up with the rapid development of digitization.
GERMAN COMPANIES IN THE AEROSPACE INDUSTRY THEY SHOULD
»» Have a hard time anticipating digital change, »» Make digital expertise a requirement when
in particular because of their economic success, hiring executives,
»» Initially hesitate to try new service and business »» Provide current employees and executives with further ed-
models, ucation programs featuring digital background knowledge
designed specifically for their needs,
»» Do not have enough executives with digital expertise,
»» Reduce the number of hierarchical levels within
»» Are more often then not still convinced of
their company,
the effectiveness of “Command & Control," and
»» Rely on a collaborative approach and improve
»» Too rarely apply tools such as Shop Floor Management,
the error culture,
coaching or eLearning to promote digitization.
»» Encourage all employees and executives to work on
new business models and innovative products
and services,
»» Make use of management tools such as Shop Floor
Management or coaching and supervision, and
»» Provide sufficient staffing and financial resources for
innovations and digitization.
STUDY: AEROSPACE 2019 CONCLUSION 31About Us
We believe
that in every company
there is an even better one.
Staufen AG is a lean management consulting firm and academy.
We have been consulting and qualifying companies and their employees
worldwide for over 25 years.
Our goal is to make every company a better one and to advance
our customers. Our special approach is to quickly set the right
changes in motion and to establish a long-lasting change culture.
Our
Awards
brand eins Thema
brand eins Thema
2015 2016
BESTE BESTE
BERATER BERATER
32 STUDY: AEROSPACE 2019 ABOUT USNumbers Data Facts
25 50
Years of experience 65 Different
Lean and Six Sigma
Training Programs
Million euros in sales
320
> 500 Employees
BestPractice attendance
Imprint
17
p. a.
> 5,000 Languages
Seminar participants p. a.
> 70
BestPractice-
> 90
Partners
Active trainers and
coaching experts
ISO 9001
FS 29990
Certified according to AZAV
STUDY: AEROSPACE 2019 ABOUT US 33Studies and White Papers You can find all studies and white papers online at www.staufen.ag/studien 34 STUDY: AEROSPACE 2019
Imprint
EDITOR
STAUFEN.AG
Consulting.Academy.Involvement
Blumenstrasse 5
73257 Köngen, Germany
PICTURE CREDIT
iStockphoto / Staufen AG
GRAPHIC DESIGN
www.weberfink.de
STUDY: AEROSPACE 2019 35CONTACT CONTACT
FOR MEDIA
Christoph Heine Kathrin Negele
Partner Aerospace & Defense Marketing Manager
c.heine@staufen.ag k.negele@staufen.ag
+49 7024 8056 0 +49 7024 8056 155
EDITOR
STAUFEN.AG
Consulting.Academy.Involvement
Blumenstrasse 5
73257 Köngen, Germany
+49 7024 8056 0
www.staufen.ag
kontakt@staufen.ag
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